In Order to Explain the Changing Gap in Earnings Between

question 100

Multiple Choice

In order to explain the changing gap in earnings between skilled and unskilled workers in recent years, economists have proposed two hypotheses. One hypothesis emphasizes

• A)compensating differentials.
• B)the increased recognition that a larger stock of human capital usually leads to higher earnings.
• C)the decreasing importance of labor unions.
• D)the increasing importance of international trade.

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Definitions:

Per Unit

A term used to express costs, prices, or other measurements on an individual basis, allowing for straightforward comparisons or calculations.

Payroll Tax

Assessments collected from employers or employees, typically proportional to the salaries that workers are paid.

Labor Market

A marketplace where employers find workers and workers find jobs, involving the exchange of labor for compensation.

Payroll Tax

A tax imposed on employers and employees, calculated as a percentage of the salaries that employers pay their staff.